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What the Clean Energy for America Act Means for Biomass

May 4, 2017

With the recent passing of a $1 trillion Omnibus spending bill with a biomass rider that directs federal agencies to treat forest biomass energy as carbon neutral, Sen. Ron Wyden (D-Oregon) is attempting to level the playing field even more for biomass by introducingthe Clean Energy for America Act.

What Does the Clean Energy for America Act Propose?

This legislation proposes tax strategies that are technology-neutral for the purpose of long-term growth. It also encourages the development of next-generation energy sources. According to the bill overview, there are currently 44 various energy tax incentives—and more than half of those are short-term, which means they don’t do much to stimulate investment. Others provide “different subsidies to different technologies with no discernable policy rationale.”

The Clean Energy for America Act would move away from the current strategy and the lapsing tax credits, and would implement a simpler system of technology neutral tax incentives that are long-term and performance-based.

Specifics are as follows:

Clean Electricity—a technology neutral tax credit based on facility cleanliness, available either as a production tax credit (up to 2.3 cents per kilowatt hour) or an investment tax credit (up to 30 percent).

Transportation Fuel—a tax credit for fuel produced domestically, with larger credits available for cleaner fuels. The credit would be open to all resources and would offer a production tax credit of up to $1 per gallon.

Energy Conservation—a performance-based tax credit for energy-efficient homes, and tax deductions for commercial buildings that are energy efficient. The larger the energy conserver, the larger the incentive.

Although these incentives are certainly long-term, they would be phased out when greenhouse gas emissions see a 35 percent reduction.